To determine your income sources, make a table, like the one below, and record all of the money coming into your home. If you have quarterly income, multiply the amount by 4 and then divide by 12 to find the monthly income. For semi-annual income, multiply by 2 and then divide by 12.
Income Sources Bi-Weekly Weekly Monthly
Your Spouses Wages
Income Tax Refund
Establish A Trading Plan
All kinds of trading require discipline to eliminate temptations and emotional reactions. Plan your entry strategy, risk management, money control, exit strategy and stick to them. Try to avoid selling or buying early and always wait for the market prices to reach the level you are comfortable trading at. Plan ahead of time the amount of money you want to place on each trade, and how much capital to put in every trade. Also, don’t make changes to your plans during a session not unless they will serve as a last resort.
Keep A CFD Trading Journal
A CFD trading journal helps you record all the trades that you make, wins as well as losses. It keeps you informed about the reasons you entered or exited a particular trade. Most importantly, you can always deduce your performance patterns so that you reflect on your thoughts and strategies.
Your journal should include the following items:
- Trading period
- Reasons for trading
- What you sold/bought
- Profits or losses
- A chart showing entry, profit target and stop
Create Realistic Trading Goals
The first rule of preserving precious capital through CFDs is to ensure that your account is alive and running for the first year. For your survival, therefore, you must establish realistic goals that are clearly defined. Your first step can be identifying what you want which is the same as having a reason to trade. Then, focus on it by doing whatever you can on a daily basis to help you achieve your goals. Remember to keep at bay all distractions that might sway you away from your objectives.
Make Use Of CFD Stops Where Necessary
If you ever find yourself on a losing line, exit the markets for a while so that you cut the losses quickly. Never also make the mistake of moving your stop loss further away, hoping that things will turn around. Trading CFDs is usually demanding and tempting meaning that getting emotional is very easy. For every trade that you enter, it will have a CFD stop assigned to it that you should consider using if need be. And as mentioned earlier, you should identify a CFD stop strategy outside live trading.
Keep Up With Market Trends And News
Various events have the potential of causing major effects on trading markets and often take traders by surprise. To avoid that, you need to stay up-to-the-minute with geopolitical and global financial events. Note that not all news releases affect markets, but being aware of the current events can protect you from making obvious errors thereby helping you cut down possible losses. If you sign up for a reputable trading site such as CMC Markets, you get the opportunity of receiving free news on the events that are anticipated or are currently moving the financial markets on a regular basis.
Only Trade When You Have A Positive Mindset
To succeed in CFDs, you must be prepared to lose. No particular trader that has a 100 percent winning strategy because everyone is bound to fail at some point. In most cases, incurring losses bring about the feelings of anger, anxiety or fear. Volatile markets, on the other hand, bring along a sense of doubt. If you trade while having these emotions, you might end up making unnecessary mistakes and hasty decisions in a bid to recoup losses. For these reasons, always ponder trading when you are in the right mindset and take short breaks if you are not.
Stick To Instruments And Markets That You Are Experienced In
Although CFD trading offers you a good number of instruments to trade in, you must stick to those that you are used to. Once you gain more knowledge and self-confidence, you can venture into more sophisticated ones such as forex or indices. Also, don’t trade too many markets because your interests would be spread too thinly. Choose several sectors, get every information you need and invest in them.
CFC trading is an ideal avenue to pursue if you are well informed about its ins and outs. Following the above seven tips will help you become a more successful CFD trader.
Find a good broker
As a currency trader, the first thing that you need to look is a premium quality broker. Look at the Introducing broker features and if everything suits your needs then start trading with them. Make sure that you have done some extensive research about the quality of the Introducing broker features. Never invest your whole earning on reputed broker unless you trade with them for at least six months. Explore their trading environment and quality of their trade execution. Some expert traders often demo trades the market with the new brokers only to get a generalized view of their offered service. Investment section is very sophisticated and you don’t have enough room to make mistake. So before you take any major decision make sure are completely confident about your actions.
Major pair trading
Instead of trading the major pair the novice traders should always trade the Forex majors. If you look at the Asian Introducing broker features then you will be surprised to see that by trading the majors you will be able to minimize your risk to a great extent. The price movement of the major currency pairs is more stable and it also generates quality trading signals. Last but not the least never take too much risk in currency pair trading even though you might have the best trading system in the world.
These prices of pairs are correlated
Forex is the largest investment market in the world. When there are lots of stock exchanges around the world, this online market dominates all of them. If you compare all of the stock markets with Forex, you will find this market size in dinosaur when compared to stock markets. There is no confusion that all these market transactions are traded on the prices of different currency pairs in a market. The currency pairs that are most traded are known as major currency pairs and the others are known as minor currency pairs. You may be hearing it for the first time but the prices of currency pairs are correlated. When the price of a currency pair rises, the prices of other pair drops. This correlation is very important for traders who are trading in Forex market. Most people who trade use this relation of the prices of different currency and they trade the market successfully. This way, you can tell of the market trend by looking at other pairs.
It also tells about the money
When you are trading in Forex, do you place your trades when there is no money? You do not and this is why knowing the prices of pairs is important. You will get a better idea of where t honey is I Forex. If you think there is no money, you can trade in other markets.
Most of the novice traders in the online trading industry is losing money due to their lack of trading knowledge. They start their trading career without knowing the market details. At times the novice traders tend to follow other people trading system to make a huge profit within a short period of time. But do you really think by following such system will make you a profitable trader? The simple answer is NO. You need to develop your trading system to trade this market. Some notice traders often ask how they should develop the perfect trading system. To be honest there is no exact answer to this question.
Many novice traders don’t know the perfect way to learn the art of trading. In such case, you need to explore different Forex trading website to get a clear idea about the structure of this market. Some traders often go for the professional trading course which is one of the best ways to master the art of trading. When your investment money on a trading education you have nothing to lose. The pro traders will always give great ideas to trade this market. If you can follow the footstep of the successful traders making money in the online trading industry will not be a hard task for you. So never step back while investing your money in trading education.
Invest the small amount of money when you are trading the market for the part-time. If you lose the money, you can know you have not lost much and you can trade the market again. Increase your amount when you are thinking of professional trading.
Follow the Professionals
When you will be trading part-time in Forex, follow the professionals on the market. You will find that they are very good in their trading and if you can follow their trading strategy, you will get ideas for the market. We do not say to follow groups as you will lose money with groups. The professionals also have their own blogs and they publish important tips for the traders. If you can follow these tips, you will find trading in Forex is more successful.
Trade with Short-Term Strategy
Many traders do not know what short-term strategies are and they trade the market with any strategies. You have to know what the short-term strategies in Forex are. It is better to trade with long-term strategies but as you will be trading the market for the part-time, you need to know how to use the strategies that can be used for making the profit in short time. When you are developing the strategy, trade the market with short-term strategy and develop the strategy. Professional traders’ trade with long-term strategy as they spend more time on the market.
Develop your Trading Skill
You cannot trade the market successfully if you do not develop your trading skill. You will be placing your trades for short time on the market and you will need expert precision to make a successful trade. Develop your strategy in Forex to make part-time trading successful.
Demo trade the market
All the expert traders always suggest the new traders start with a demo account. The retail traders jump into the trading world without understanding the associated risk in trading. They simply start trading the market based on their gut feelings. It’s true that they will often get big winners based on the emotional approach in trading but considering the longer time frame scenario, they are running their trading career. Being a new trader you need to understand the fact that 95% of the traders are losing money in Forex. So it’s highly unlikely that you will be able to make money from the very beginning of your trading career.
Having access to the professional online trading account will not make you rich person. You have to learn how to trade this market with the high level of precision. Being a new trader learn about the advance trade management system so that you can easily deal with your losing trades. If possible, demo trades the market for the first few months so that you can get a clear overview of the nature of this market. Try to develop a simple but effective trading system by trading the market in a demo environment.
It polishes your techniques
You may think why you need to practice in Forex. This market has given lots of opportunities to the traders to make profits. You are given demo accounts to make your profits and you do not need to trade the market for practice. You can start trading in your live accounts and profit will come to you. These type of concepts may work in dreams but they do not work in Forex trading. You have to polish your techniques in Forex and the only way to do that is by practicing your trades in demo accounts. A practice is not only placing trades in markets but you also have to set what should be your position size, how leverage if you are going to take and if you should set stop-loss in the trades if the market is going to be volatile. This market has no second chance and if you lost your money, it is lost forever.
Makes you acquainted with the volatility
The Forex market is very volatile and trends can change anytime. When you practice trading in Forex, you will develop your risks to reward ratios for how to save your money from this volatility. Without practice, it is not possible.